Court Dismisses Suit Against MAXXAM, Hurwitz, Others; Orders Plaintiff Martel to Pay Costs
HOUSTON--(BUSINESS WIRE)--Jan. 25, 1999--A Federal District Court in Houston has dismissed as "abusive litigation" a civil suit brought by Robert Martel of Humboldt County, Calif., against MAXXAM Inc. (ASE:MXM), its chairman, Charles E. Hurwitz, and others, and has ordered Martel to pay the defendants' costs.
Describing Martel as "a bystander" who "knows nothing, saw nothing, did nothing," U.S. District Court Judge Lynn N. Hughes determined that Martel "lacks standing, was not the original source of the information, and filed his suit too late." Martel filed suit in January 1995, saying he was bringing the action on behalf of the U.S. government; however, the U.S. government declined to participate in the suit.
Martel's suit had sought $1.6 billion (subject to trebling) of damages attributed to the 1988 failure of a Texas savings and loan association. MAXXAM, Hurwitz, and others were minority shareholders in the holding company, United Financial Group (UFG), which owned the savings and loan, United Savings Association of Texas (USAT). USAT was one of many financial institutions that failed in the 1980s as a result of the crash in Texas real estate, the oil recession, and interest rate volatility. As a result, MAXXAM, Mr. Hurwitz and other investors lost their investments in UFG.
Judge Hughes characterized Martel's pleading as "Regurgitating politicized half-truths ... " In his determination that Martel lacked standing to bring his suit, Judge Hughes said, "Suit may be brought only by a person who is directly affected by the transaction and legal consequences; being politically or morally aggrieved about an event does not make one a party to it in either the legal or practical sense."
Finally, in addition to assessing costs against Martel, the court gave Hurwitz and all other defendants "until February 3rd to move for additional equitable expense shifting." |
